Debt to Equity
since 2005
Calculation
Illinois Tool Works Inc., debt to equity, long-term trends, calculation
| Debt to equity | = | Total debt1 | ÷ | Stockholders’ equity attributable to ITW1 | |
|---|---|---|---|---|---|
| Dec 31, 2021 | 2.12 | = | 7,687) | ÷ | 3,625) |
| Dec 31, 2020 | 2.55 | = | 8,122) | ÷ | 3,181) |
| Dec 31, 2019 | 2.56 | = | 7,758) | ÷ | 3,026) |
| Dec 31, 2018 | 2.27 | = | 7,380) | ÷ | 3,254) |
| Dec 31, 2017 | 1.82 | = | 8,328) | ÷ | 4,585) |
| Dec 31, 2016 | 1.84 | = | 7,829) | ÷ | 4,254) |
| Dec 31, 2015 | 1.42 | = | 7,422) | ÷ | 5,224) |
| Dec 31, 2014 | 1.09 | = | 7,457) | ÷ | 6,819) |
| Dec 31, 2013 | 0.65 | = | 6,344) | ÷ | 9,703) |
| Dec 31, 2012 | 0.48 | = | 5,048) | ÷ | 10,561) |
| Dec 31, 2011 | 0.40 | = | 3,990) | ÷ | 10,018) |
| Dec 31, 2010 | 0.30 | = | 2,830) | ÷ | 9,370) |
| Dec 31, 2009 | 0.36 | = | 3,129) | ÷ | 8,808) |
| Dec 31, 2008 | 0.48 | = | 3,677) | ÷ | 7,663) |
| Dec 31, 2007 | 0.25 | = | 2,299) | ÷ | 9,351) |
| Dec 31, 2006 | 0.16 | = | 1,418) | ÷ | 9,018) |
| Dec 31, 2005 | 0.16 | = | 1,211) | ÷ | 7,547) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The financial structure reveals a significant shift in capital composition from 2005 to 2021, characterized by a transition from a conservative, equity-heavy balance sheet to a more leveraged position.
- Total Debt Trajectory
- Total debt exhibited a consistent long-term upward trend, increasing from 1,211 million USD in 2005 to a peak of 8,328 million USD in 2017. While there were minor fluctuations, such as a decrease between 2008 and 2010, the overall trajectory remained positive until 2017, after which debt levels stabilized and slightly declined to 7,687 million USD by 2021.
- Stockholders' Equity Evolution
- Equity attributable to the company followed an inverse trend relative to debt. After reaching a peak of 10,561 million USD in 2012, equity entered a period of sustained decline. The most pronounced reductions occurred between 2013 and 2019, with equity falling from 9,703 million USD to a low of 3,026 million USD. A modest recovery is noted in the final two years of the period, ending at 3,625 million USD in 2021.
- Debt to Equity Ratio Analysis
- The debt to equity ratio serves as a primary indicator of the increasing reliance on borrowed capital. Between 2005 and 2012, the ratio remained relatively low, fluctuating between 0.16 and 0.48. A pivotal shift occurred in 2014 when the ratio first exceeded 1.0, reaching 1.09. This upward momentum continued aggressively, peaking at 2.56 in 2019, indicating that debt levels were more than 2.5 times the value of stockholders' equity. The period concluded with a moderate reduction to 2.12 in 2021.
The combined effect of rising total debt and diminishing stockholders' equity has resulted in a substantial increase in financial leverage. The transition from a ratio of 0.16 in 2005 to 2.12 in 2021 reflects a fundamental change in the company's approach to financing its operations and capital structure.
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Comparison to Competitors
Illinois Tool Works Inc., debt to equity, long-term trends, comparison to competitors
| Illinois Tool Works Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | 2.12 | — | 2.29 | 0.52 | 0.87 | 1.06 | 1.07 | 0.43 |
| Dec 31, 2020 | 2.55 | — | 2.42 | 0.54 | 2.11 | 1.28 | 2.02 | 0.44 |
| Dec 31, 2019 | 2.56 | — | 2.58 | 0.52 | 3.21 | 0.87 | 4.05 | 1.04 |
| Dec 31, 2018 | 2.27 | 40.85 | 2.60 | 0.47 | 3.55 | 0.89 | 9.04 | 1.18 |
| Dec 31, 2017 | 1.82 | 31.32 | 2.55 | 0.45 | 2.09 | 1.04 | — | 0.93 |
| Dec 31, 2016 | 1.84 | 12.18 | 2.80 | 0.56 | 1.80 | 0.81 | 9.45 | 0.87 |
| Dec 31, 2015 | 1.42 | 1.57 | 2.57 | 0.56 | 2.02 | 0.66 | 4.62 | 0.75 |
| Dec 31, 2014 | 1.09 | 1.05 | 2.35 | 0.57 | 2.85 | 0.49 | 1.81 | 0.63 |
| Dec 31, 2013 | 0.65 | 0.65 | 1.81 | 0.57 | 2.93 | 0.51 | 1.25 | 0.64 |
| Dec 31, 2012 | 0.48 | 1.77 | 2.29 | 0.72 | 3.37 | 0.58 | 157.90 | 0.90 |
| Dec 31, 2011 | 0.40 | 3.52 | 2.69 | 0.51 | 3.89 | 0.70 | 6.45 | 0.47 |
| Dec 31, 2010 | 0.30 | 4.49 | 2.63 | 0.47 | 4.02 | 0.62 | 1.35 | 0.48 |
| Dec 31, 2009 | 0.36 | 6.07 | 3.62 | 0.51 | 4.35 | 0.86 | 1.22 | 0.49 |
| Dec 31, 2008 | 0.48 | — | 5.84 | 0.68 | 5.00 | 1.17 | 1.24 | 0.72 |
| Dec 31, 2007 | 0.25 | 0.91 | 3.20 | 0.66 | 4.45 | 0.83 | 0.44 | 0.43 |
| Dec 31, 2006 | 0.16 | 2.01 | 3.98 | 0.63 | 3.85 | 0.52 | 0.64 | 0.46 |
| Dec 31, 2005 | 0.16 | 0.97 | 3.05 | 0.65 | 3.39 | 0.45 | 0.61 | 0.48 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Illinois Tool Works Inc., debt to equity, long-term trends, comparison to sector (capital goods)
| Illinois Tool Works Inc. | Capital Goods | |
|---|---|---|
| Dec 31, 2021 | 2.12 | 1.26 |
| Dec 31, 2020 | 2.55 | 1.75 |
| Dec 31, 2019 | 2.56 | 2.08 |
| Dec 31, 2018 | 2.27 | 2.03 |
| Dec 31, 2017 | 1.82 | 1.74 |
| Dec 31, 2016 | 1.84 | 1.60 |
| Dec 31, 2015 | 1.42 | 1.64 |
| Dec 31, 2014 | 1.09 | 2.06 |
| Dec 31, 2013 | 0.65 | 2.00 |
| Dec 31, 2012 | 0.48 | 2.56 |
| Dec 31, 2011 | 0.40 | 3.04 |
| Dec 31, 2010 | 0.30 | 3.10 |
| Dec 31, 2009 | 0.36 | 3.46 |
| Dec 31, 2008 | 0.48 | 4.19 |
| Dec 31, 2007 | 0.25 | 3.21 |
| Dec 31, 2006 | 0.16 | 3.02 |
| Dec 31, 2005 | 0.16 | 2.53 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Illinois Tool Works Inc., debt to equity, long-term trends, comparison to industry (industrials)
| Illinois Tool Works Inc. | Industrials | |
|---|---|---|
| Dec 31, 2021 | 2.12 | 1.37 |
| Dec 31, 2020 | 2.55 | 1.82 |
| Dec 31, 2019 | 2.56 | 1.82 |
| Dec 31, 2018 | 2.27 | 1.85 |
| Dec 31, 2017 | 1.82 | 1.65 |
| Dec 31, 2016 | 1.84 | 1.54 |
| Dec 31, 2015 | 1.42 | 1.51 |
| Dec 31, 2014 | 1.09 | 1.89 |
| Dec 31, 2013 | 0.65 | 1.79 |
| Dec 31, 2012 | 0.48 | 2.29 |
| Dec 31, 2011 | 0.40 | 2.60 |
| Dec 31, 2010 | 0.30 | 2.68 |
| Dec 31, 2009 | 0.36 | 3.01 |
| Dec 31, 2008 | 0.48 | 3.54 |
| Dec 31, 2007 | 0.25 | 2.73 |
| Dec 31, 2006 | 0.16 | 2.49 |
| Dec 31, 2005 | 0.16 | 2.42 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).